PetroTal gets back to work after lifting of river blockade

20th Jun 2023 14:58

(Sharecast News) - PetroTal said in an update on Tuesday that the Indigenous Association for Development and Conservation of Bajo Puinahua (AIDECOBAP) had removed the river blockade on 10 June, thus allowing the resumption of its operations.

The AIM-traded firm said the removal also included the release of both Peruvian and Brazilian oil convoys that were seized during the demonstration.

It noted that there were no reported injuries to crew members during the release, and no oil spills or operational accidents occurred during the transition.

The company said the decision to remove the blockade was made after an alliance act called the 'Acta' was signed by the Regional Governor of Loreto, Perupetro, Puinahua's District Municipality (PDM), and AIDECOBAP.

Notably, the Acta was not signed by the Junta Autonoma del Puinahua (JAP), which represents the majority of the population, nor by PetroTal.

As part of the Acta, PetroTal's representation was removed from the 2.5% fund's executive committee, and replaced with the Regional Government of Loreto.

The remaining members of the committee included AIDECOBAP, the JAP, Perupetro, and the PDM.

However, PetroTal said it does not consider the Acta a binding legal document, and does not recognise it.

It said the Prime Minister's Governance Office had taken the lead in mediating the situation for a peaceful and long-lasting resolution.

"Removal of the illegal blockade and release of the oil convoys is a positive step for the overall safety in the Loreto area, however the company remains cautious, yet hopeful, that democracy will prevail in deciding who best manages the social fund and the best allocation of its resources in the future," the PetroTal board said in its statement.

Following the reopening of river access, the Peruvian and Brazilian oil convoys had resumed their travel to Iquitos and Bretana, respectively.

PetroTal had temporarily shut down its field on 6 June for planned technical maintenance and installation work, which was completed on 11 June.

The company also initiated line fill operations concurrently.

Despite the disruptions caused by the river blockade, PetroTal said it had quickly ramped up production, averaging nearly 22,000 barrels of oil per day over the last seven days.

The company was expecting to maintain production near 22,000 barrels per day, subject to barge availability, in the coming weeks.

At that level, PetroTal estimated that average production during the second quarter would be 5% higher than its previously-provided guidance of 17,000 barrels of oil per day.

Additionally, PetroTal highlighted robust production at well 15H, which commenced full daily production on 12 June after the lifting of the river blockade.

The well was completed on schedule, incurring a cost of around $14.9m, which included a side-track due to drilling tool challenges.

Over the last seven days, well 15H had produced at an average rate of 8,700 barrels of oil per day, positioning it among the top initial producers drilled to date.

"PetroTal is pleased to announce the first successful funding of its reinitiated dividend on 15 June of approximately $14.5m, based on first quarter results," the directors added.

"The company plans to set and approve its second quarter dividend level at its upcoming early-August board meeting."

At 1435 BST, shares in PetroTal were up 2.83% at 41.39p.

Reporting by Josh White for Sharecast.com.